asia-pacific region as strictly naval and air. there's a lot of air there and a lot of water there but a heck of a lot of people there as well. and the fact of the matter is, the army has long been a dominant posture in the pacific. over 76,000 troops. we had 120,000-plus activities and other kinds of operations with our pacific-asia partners. we're looking to grow those. the chief just got back from business to japan and korea. as we develop jointly into our new strategy as the chief suggested, the army has expertise in those missile defense platforms and if we can fulfill an expanded role of that mission, that would be something we'd want to pursue very anxiously. >> we thank you for your service and also for the great men and women that you constantly turn out. with that, mr. chairman, i yield back. >> ms. davis. >> thank you, mr. chairman, and thank you, mr. secretary and

general for being here and for your service. i wanted to go back to the sexual assault question for a second because i don't know if you had as much time, general, to respond to the chain of command issue and perhaps mr. mchugh you'd like to weigh in as well. as you know, there are a lot of victims and people who are concerned that the chain of command has not allowed victims to have the kind of access to help that perhaps they have needed. particularly in the past, but even today. could you comment on that a little bit more and why you feel that it does serve best? i would say for myself, i think this is a leadership issue. and so i think it's very important that leadership take responsibility and accountability, but on the other hand, we know that there are quite a number of instance when that has not worked. >> thank you. and i don't disagree with your statement. it absolutely is a leadership

issue. it's a commanders issue as we would call it. and it's something we have to continue to work. again, it's even with our -- it's about continued education. it's about making sure that we have a message that goes through the chain of command that this is something that's incredibly important to the welfare of the army, the welfare of our profession. and we'll continue to do that. what i have found over my years of experience with these types of issues is, first off, you have to have a couple of things. you have to have the ability for victims to -- some victims do not -- it's about the victims feeling comfortable how they report and who they report to. so you have to have a variety of ways for them to report. and that's why it's important that we continue to have them if they want to, not use the chain of command to report and report outside of the chain of command. and we are establishing -- we have established and will continue to emphasize that if that's what they feel comfortable doing. but it's also important for us to ensure, the chain of command

that this is an important issue for morale. it's important issue for our ability to skut our mission on day-to-day basis and 4 top train them on what's available in the uniform code of justice and other means in order to hold people accountable. and that, in fact, as we do in everything we, do we'll hold our commanders accountable for the discipline and morale of their units. and it's important that they will understand this as we go forward. so what we've done is we're increasing emphasis within our judge advocate general corps to help train our commanders to ensure they understand what they can and -- what they can do. also it's important for us working through the chain of command to emphasize the importance of this. we now, we talk to every battalion and brigade commander at ft. leavenworth. they come through there every

month for a precommand course. we have added a portion specifically dedicated to this subject so they understand the importance of this. and, in fact, the vice chief of staff of the army is headed out there next week to talk about a variety of subjects. this being one of the main subjects that we talk about. and so i think it's things like that will help us to emphasize in the chain of command their responsibilities. the other thing is, to make sure that we have enough oversight where we disconnect a bit. be able to look at it from a little higher level from the chain of command. in other words, people who are not so close to the incident. and they can -- we have ways to do that. we're working as well as using that as a technique as well. so again, we're focused on this, ma'am. >> can i -- i want to thank this committee and this congress because i think you passed some very important legislation in the last session that set some

requirements as to sexual assaults for response coordinators, sarks and victims advocates. the army had already started on that but you raised the bar as to the requirement that they be -- the sarks be at the brigade level and victims advocates, we have two vas at every battalion level and company level. and that provides the kind of alternative that the chief had just spoken about. if a victim feels uncomfortable going to their chain of command. but that really, as you noted, ms. davis, that's the critical part of fixing this more fully. making those commanders sensitive. making them understand that if they don't get it right, they're not going to be in this army much longer. it provides the prosecutors the opportunity to take action against people who are perhaps not violent sexual offenders but inappropriate touching. the kinds of actions that

probably in the civilian sector nothing is done. and we take action against them as well. there's an article 15 or holding off a promotion or pay cuts -- >> thank you, mr. secretary. my time is about up. i did want to make one comment if the chairman would let me. i think one of the things i've heard is that if women are serving up and down the commands and across the spectrum of the services then in many ways we'll have less of this. so i just wanted to share my somewhat disappointment, i think, with the latest report that came out on woman in combat and hope we can work together to make sure there's a process in place to be able to really determine the physical standards that are needed and how we're going to get to that particularly for women who want to serve in those commands. >> thank you. >> thank you, mr. wilson? >> thank you both for being here. as an army veteran, i'm particularly happy to see the venue today. additionally, i am very grateful to represent ft. jackson. i soon will be having a

geographic presence adjacent to ft. gordon and so it's really exciting. and then i've got three sons serving in the army national guard. and so i appreciate your service. and, mr. secretary, i'm very grateful to be seated in the john mchugh seat -- chair. and so it's a great honor to follow you in supporting military personnel. so thank you so much for your service. and general odierno, one of the highlights of my congressional service, we knew of your success in iraq. but when we came to be briefed and you came up with a diagram, what appeared to be the state of virginia, and you explained that this indicates a high-level of violence where northern virginia would be the heighth, but then the surge and then it led to the eastern shore and so it was a diagram that could be understood by anyone and so your success is just greatly appreciated by me.

with that, though, i'm really concerned about the administration's budget. and in particular, mr. secretary, the extraordinary fee increases in regard to tricare. we have commitments to our service members, our veterans and the service that our young people make is just extraordinary. and their families. and sadly, the administration is proposing a tricare fee increase, fy '13 of 30 to 78%. and then over the next five years from 94% to 345%. to me, this is a great concern for the people i represent. and, in fact, i'm very concerned and i would like to know how you feel this will affect recruiting, retention and then what message does this send to our young people who are in the field today? >> well, i think you have to remember, as to recruiting and

retention, none of these increases would affect those who are currently serving. so it -- the increases would only be affected on those retirees under the age of 65 who are out of the military, obviously, and working by and large. this was not an easy decision. but it is something that this committee has talked about for a good number of years and it is simply the fact that the health care system within the military services, just as it is within the civilian sector from a price perspective, is out of control. while the percentage of these increases over time and some of the categories sound to be quite large, the fact of the matter is, a, these are the first increases since the program was put into place in the mid-1990s. and, b, from a comparative perspective, as in relation to this civilian commune iity, the

tricare program will still be very beneficiary and in mow cases, a far more generous program than you can find in the private sector. so the interest here and it's shared noong the ncos and fellow ncos and service chiefs and all the service secretaries is that we have to do something now to ensure that this program remains viable for those great men and women in uniform and their families who have served. and the reality is the longer we wait as in so many of the other problems the congress is trying to deal with, the answer gets harder and harder and the increases get larger and larger. we think the time to act is now. maintaining a highly generous program and certainly those great men and women in uniform have earned it. >> and tricare is so appreciated. a concern i have is hollowing out of the military. i want to thank you both for your courage in regard to

speaking out in regard to sequestration. there are different definitions of hollowing out. my concern is for senior ncos and junior officers who have combat experience. this is invaluable. how are we going to address this? is there a preference? is there protection? what will we be doing to maintain people with combat experience? >> well, first off, that's why for me, as we come down in size, it's about the length of the ramp over five years. that's what's so key to that. because if we can do it over a five-year period as we've asked for, that enables us to keep the best to ensure we keep the combat tested, the combat experienced officers and noncommissioned officers we have. if we're asked to do it more quickly than that, then we will lose many of our combat tested and noncommissioned leaders, both officer and noncommissioned officer. that's why this five-year period is so important for us as we look at drawing down the army. >> thank you very much.

>> thank you. mr. lobsack? >> thanks, mr. chairman and to both of you for your service. as i've discussed with both of you many times in the past in various venues, as you'll recall istrongly believe that a key to the reversibility and a key to ensuring our country is able to rapidly equip our soldiers in the event of future contingencies is our organic industrial base. i'm pleased that congressman shelling and i were able to expand the bility of our arsenal center and public/private partnerships. and i believe those partnerships, as does congressman shilling, will be key to maintaining the readiness for our arsenals. however ibelieve the army must do its part. and i do believe that the army must actively support the readiness of our organic industrial base. and specifically, my question then regarding this particular issues, what is the army's plan

to work load the organic industrial base, including organic manufacturing base through the arsenals to ensure, really, that its capabilities are maintained in order to respond in case we do have another oco at some point down the road. and if there's a plan, how will it be implemented to ensure these critical capabilities are maintained? >> thank you for your concerns. and on a very important area. generally when people talk about so-called reversibility, i think they perhaps naturally think about reversing our end strength numbers. that's something we spend a lot of time on, and i think one of the more important components of the way in which the army has shaped itself through this budget is we retain those nco, senior nco positions and particularly field grade officers who would be so critical to expanding our numbers. but there's another component to that reversibility as well as you noted, sir, and that is our ability to produce the products,

the weapons, the platforms that are necessary to -- when we send our war fighters out to do the hard work of freedom. i mentioned earlier, one of the critical components of how we're going forward right now are the various analyses that both the department of defense and the army are conducting, sector by sector, tier by tier analysis through d.o.d. and an army baseline industrial capability analysis trying to both identify where our major risk lies. where the single point of failures exist. and also to try to establish the strategy where we can do as much as we possibly can whether it's through ppps, as rock island, i think, has done very, very effectively, or through increased fms to try to keep those work lines busy and open. this is going to be a very difficult challenge. these are in large measure highly skilled workers and that's certainly true at rock island. i've had the pleasure of visiting there.

we have a similar hard metal facility in albany. and those two do some pretty important things. so this is an ongoing effort, and we recognize it. and, frankly, all of our locations were as aggressive and forward leaning as rock island has been to go out and to develop partnerships, we'd be a little less challenged. so i appreciate yours and senator durbin's and the entire delegation's vigilance on that matter. >> thank you. >> if i could, as you stated, the organic industrial base is key to our ability to continue to be capable of not only reversibility but to sustain the force as we move forward. and it has been for the last several years. we've developed core functions at many of these areas which will enable us to sustain what we need enabling these core functions. we will have to continue to assess as we look at our budgets in the future to see, do we have

to redesignate some core functions or combine some, but i'm confident that we have a good program in place to take advantage of these core functions that we've established at many of these arsenals, depots, et cetera. as you know, there will be some reduced -- for the next few years, i think we'll sustain a fairly high rate but as we move forward and we continue to finish the reset coming out of iraq and afghanistan, we'll have to start to reduce some of the capacity, but we will try to keep the expertise necessary to sustain these core functions that we'll need over the long haul. >> and i think from a national security standpoint, i think we can all agree should we have another overseas contingency operation, we don't want to be in a situation where it takes some time to ramp up the production of whatever it is that the arsenals are -- or whatever are actually producing at that time as was already mentioned. make sure we do provide for our troops when they go overseas in whatever mission it may be that they're trying to perform.

i do have one question for the record i'd like to submit having to do with our reserve components as well, if i may do that as well. thank you, mr. chair. i yield back the balance of my time. >> thank you. the vote has been called. i'm -- i plan on trying to get in two more questioners before and then we will recess and come back as soon as we can. mr. lobiando. >> mr. secretary general, thank you for being here and for your service. mr. secretary, i have a two-part question for you. i see that this year's budget you submitted a request for approve tool enter into a second multiyear contract for the ch-47 chinook helicopter. since you've been using the multiyear for chinooks for the last five years and i understand that one will expire this year, what have you seen as the biggest benefit for you and the taxpayer of having the authority that has led you to request a second multiyear contract. and the second part of it is the

armed aerial scout program an army priority? >> as the ch-47, we found that multiyear contract to be very efficient. we're very, very pleased with the product and the product line. and as we have looked hard at our acquisition strategies both successes and failures over the last several years, the ch-47 contract is currently configured, seems to have embodied a lot of the answers and a lot of the solutions to some of our challenges. so we thought it was in the best interest both in terms of production line but most importantly for the taxpayer and for the army to extend that contract. i'm hoping that that comes through to fruition. as the armed aerial scout is still a priority for us. we're looking at an analysis of our way forward, as you know, for now. we're deal with the shin okchin

a bridge to that. and the chinook will be a part of our inventory probably until at least 2025, but we still believe we need an armed aerial scout program and we're pursuing it as an important priority. >> if i could just add to the last piece, the armed aerial scout is important for us. it's an important capability we have to sustain. as the secretary said, we're doing an analysis of alternatives that will be done in '13. and once we do that, we'll have to make a decision once we go to a new aircraft or continue to keep the warrior and upgrade the warrior. and that will be a decision that is made next year. and right now, we expect to have the warrior through 2025. so this is an incredibly important program. we'll look at the analysis of these alternatives we have next year and then decide how we want to move forward. >> i said chinook. obviously, warrior. thank you. >> mr. secretary and general,

thank you. general, can you tell us what you believe the status and readiness of the army's current inventory of prepositioned equipment is? >> i feel very confident with it. in fact, we've just actually issued our predeploy automate our equipment in kuwait to the brigade that moved it there from iraq and they've been exercising with it and it was in very good condition. it's important for us to sustain our preposition fleet in very good condition. now we are going to continue to review this. as we look at the change in strategy, we'll look at do we have to make some minor adjustments in prepositioned fleets. are they in the right sflas do we need training prepositioned stocks to do multilateral training in the pacific, to do rotational training in europe. and we'll take a look at that. as we're downsizing, we have an opportunity here to use some of the equipment that were in some of our forces potentially to use in the prepositioned sites.

that will be a continued analysis we conduct. it's a very important program and it's going to become more important as we move to the future. >> thank you very much. >> thank you. mr. kissel. >> thank you, mr. chairman. mr. secretary and general, thank you for being here today. obviously, time is an issue right now. i was wanting to hear a little bit more about the importance of a ramp down in attrition, but i think, general, you mentioned that that five-year plan is so important to what we're doing to be able to keep the best of the best. i also wanted to talk more about equipment. in one of our readiness hearings awhile back we were discussing where do we go with equipment? how tied down are we to equipment we might have versus what we think we might need in some of the future challenges we have. two questions i wanted to zero in on, i'm going to be spending quite a bit of time next week with a lot of our reserve and

guard components in north carolina. just what is -- do you all anticipate the role of the guard reserve being and how we're going to balance that out towards where the challenges we have? >> i'll take that first. in terms of the guard and reserve first, you know, the lessons we've learned here is that we have to have a total army. we have to have to ready capabilities in the reserve component for us to be successful as an army, especially as we continue to downsize. we want to take advantage of the experience that we've gained in our active reserve component as they've been a significant part of our deployments in iraq and afghanistan. what we're going to do is set up a progressive readiness model that will enable us to attempt to sustain key components of the reserve component and continue to sustain an operational reserve. it won't, obviously, be as big as it is now because of the

requirements in iraq and afghanistan. we'll rotate units through and provide them more dollars in order to sustain a readiness level that will enable them to continue to contribute on rotational basis operationally. i think in the long term, that will help us to sustain a higher readiness rate within the reserve component. so we're very focused on that. >> -- in recent years to try to upgrade the level of equipment within the reserve component. both the reserve and the guard. i think the data points suggest we have come a long ways. for example, the x. on hand ratings right now is 87%. the national guard is also 87%. the reserve is 86%. and based on this budget and where it lies, we hope to grow

the guard to 92% and the reserve to 90% by just the end of '13. so the challenge as the chief noted going forward is making sure we maintain that level in the readiness side and the equipment part of that rating and also the personnel and how we do that is something that i want to give a tip of the hat to the chief and to leadership of both the guard and the reserve components are working together to make sure we have a readiness model that works and everybody agrees upon. >> thank you, gentlemen. and one quick question. research and development. do you feel comfortable that we have enough monies allocated for that to keep us ahead of the fight in all situations? >> well, as mr. smith said, would i take more money? and the answer is sure. but within this budget construct that i think we all agree is achievable and is viable, the

r r&d, i think, is sufficient to keep wrus we need to be. >> thank you, sir. i yield back, mr. chairman. >> thank you. anyway, we're going to expedite and hopefully the recess will be as short as we can make it. thank you.

so we have a break in this hearing for the army budget for 2013. the president has requested $525 billion for the defense department for next year. it's a 1% cut in discretionary, non-war spending. the budget has about $88 billion in war spending but it's about $27 billion less than last year. the overall budget for next year is proposed at $3.8 trillion in total spending reducing the debt a projected $3 trillion. discretionary spending goes down about 3%, but overall spending increases mainly due to growth in the government's major health benefit programs.

the president's budget is a recommendation for congress when it passes spending for the live pictures from the floor of the house. committee members have headed over to the house for a couple of votes. the most important one being the compromise on the payroll tax cut extension. and assuming that it passes, we are expecting that legislation to move over to the senate for passage later today. it's one piece of legislation members of both bodies are hoping to wrap up going into the presidents' day break. you can see live coverage of that vote in the house right now on our compannian network, c-span. about a ten-minute break for votes here in the house. while we wait, a look at the payroll tax cut extension and your phone calls from this morning's "washington journal." >> let's get to some calls. redwood valley, california, is up first. this is rose lynn who is a democrat. good morning. >> caller: yes, good morning. i'd like to say that everyone talks about this as a middle

class tax cut. but what it is is it reduces social security income funding and will add to the national deficit by about $100 billion. and if each person says, well, you know, we're going to have $40 or $60 or more to spend each month, how wonderful this is, but this is undermining social security because this is a withholding tax that is taken out on all of our paychecks. and we undermine this in 2011 and once again, we're undermining this in 2012 or going to. and this reduction is increasing the national deficit, but it's underfunding social security. and i really feel that saying that we're going to take the money and replace it with general fund money is incorrect. and the reason i believe that that's incorrect is because we already have a deficit and we're just going to increase the

deficit. so whether it's democrat or republican, i think it's going to be a heated debate coming up in this election that those that vote for this proposal are voting to undermine the social security system that benefits so many people, especially in these economic times but benefits our seniors and people on disability and others. >> so if you had a -- if you were here and were able to make the decision, how would you fix the situation? >> caller: i would increase the income cap on social security so that the wealthier pay more into the system. and that's theological answer because the income cap, i think, cuts in at about $96,000 a year. and after that, you don't have to pay the same rate as people who make less money. so i finishing you raise the income cap so that the wealthier pay more into the system, then you are going to make social security financially solvent for years and years into the future. and so that would be the so